Life continues to be tough for IPOs

MUMBAI: That investor sentiment is on shaky ground was evident in the
response generated to three small-sized issues that were to close for
subscription on Tuesday. While two of the three issues managed to
garner investor interest, the third, Lotus Eye Care Hospital, was
forced not only to extend its subscription period by three more days,
but also to lower its price band.

The issues that did close could not, however, boast of high
subscription numbers, though retail category, unlike earlier
instances, was fully subscribed.

In the case of Lotus Eye Care Hospital, the merchant bankers have
announced that the issue would now close on June 20 and revised the
price band downward to Rs 36 to Rs 38 per share (from the earlier Rs
38 to Rs 42 per share).

According to NSE data, the issue was subscribed 0.61 times with the
QIB category being subscribed 0.70 times. The retail and HNI category
has been subscribed 0.71 times and 0.14 times, respectively.

Prime Database MD Prithvi Haldea attributes this to "bad secondary
market, adding that "small-sized issues face difficulties" when it
comes to generating institutional interest even during normal market
conditions.

The other issue that closed on Tuesday was that of First Winner
Industries, which was subscribed 1.26 times, according to NSE data.
The QIB portion was subscribed 1.05 times, with the retail and HNI
segments getting subscribed 1.32 times and 1.84 times, respectively.

Incidentally, First Winner was fully subscribed only after it extended
its bidding period and revising its price band downward to Rs 115 to
Rs 125 per share (from Rs 120 to Rs 130 per share). The issue was
originally scheduled to end on June 12.

The last of the three issues, Archidply Industries, presents an
interesting case. The QIB portion has been subscribed only 0.20 times
or 20%.

Still, there has been no extension to the issue, with bankers managing
the issue maintaining that the "prospectus clearly mentioned that only
10% of the issue size was required to be filled by QIBs".

Archidply Industries witnessed a strong response in the other
categories. The retail segment was subscribed 3.04 times, while the
HNI portion was subscribed more than two times.

These segments were not even fully subscribed till Tuesday afternoon.
Around noon, the retail segment was subscribed less than 40% or, in
other words, 0.40 times.